Published CommPro.biz 2014.04.29

Ethics, Easy, Right? Wrong!!

Nothing to it, ethics is simple. All you have to do, is do “The Right Thing.” The problem comes when “The Right Thing” is not all that simple. It isn’t easy to speak up when your job is on the line. It isn’t even easy to speak up when a friend drops an inappropriate “F-Bomb” or worse makes an always inappropriate racist joke. A lot has to do with personality. Some are gifted with the ability to speak up in such situations. Others, who would never behave unethically, are just not able to speak out against unethical behavior. Some don’t want to alienate anyone.

And while the day-to-day situations we face are important, there are other cases where we must act; especially in the workplace. We have to act if a fellow worker is taking shortcuts that could endanger others, or just not providing service at the level promised. We have to act when we know the company is cooking the books as they did at Enron, or in the Libor scandal. When millions are being ripped off as they were when Enron manipulated energy costs. Even worse, hundreds of millions were hurt when a handful of traders manipulated Libor, impacting every entity and every person paying interest in every corner of the globe.

Some of these examples are illegal, others are unethical. Too often people fail to understand that the ethical line is drawn far from the legal line. Compliance and ethics get mashed together; corporate responsibility for ethics is given to legal counsel. Bad move, attorneys are trained to stay inside legal bounds. Some companies never learn. Hewlett Packard hired another lawyer to oversee ethics replacing Kevin Hunsaker, a lawyer who narrowly escaped jail time when he advised that a witch hunt for a Board of Directors leak was legal. It wasn’t legal and it was miles from ethical. If Hunsaker had based his advice on ethics, it would have saved all those involved worlds of trouble.

High speed trading, the practice of literally manipulating the stock markets could not be more unethical. Its practitioners dart in and out in milliseconds seeking those about to buy a stock, beating them to it and jacking up the price the buyer ultimately pays. Grandma’s pension fund and others lose. These buccaneers of our capital seas cry out that what they do is legal. At the moment so it is, however, it is far from ethical.

It is not always easy to see the ethical line and sometimes it is not easy to hew to that line. It takes practice and sometimes courage. It takes a willingness to risk everything from the loss of a friend to the loss of a career. You will likely find other friends, but you may not find another job. However, if you remain silent to keep a job, you will forever wish you had spoken out. And that job will grow heavy and seem sour every day when you cross over the threshold to your workplace.

Originally published in CommPRO.biz

Business Ethics Is Not 

An Oxymoron

 

Every day all but a few of us go out into the world and try our best to do the right thing. That’s true in our personal life; that’s true in our workplace. Why then does it seem that all we hear about are the bad things? The Enrons, the Adelphias, oil spills in the Gulf of Mexico, bribes at Walmart, reckless bankers destroying the world economy. Given all that and more, how can we say “Business Ethics is not an Oxymoron?”

It has to do with what we human beings consider news. By and large we aren’t interested in the good stuff. Quiet day-to-day happenings occasionally make for an interesting feature story, but the front page headlines tend more toward mayhem, treachery, and such. We don’t go to the race track to see the drivers make left turns; we go to see the cars crash. We don’t head for the movies to see ordinary life. We don’t pick up novels about good folks doing well, but in real life good folks doing the right thing and doing well is actually the norm.

Several years ago two academics and a writer published Firms of Endearment documenting their research into business ethics. They set out to find companies that maintain the highest ethical standards. Companies that deal with all their stakeholders at the highest ethical levels: their customers, their employees, their vendors, their community, the environment and finally their bottom line, their lenders and shareholders. They found them, great examples, nice outfits to deal with and have around. However, the remaining question was, do they make any money?

It turns out that over the ten years prior to the Firms of Endearment study, the public companies that met their ethical bar returned eight times the Standard & Poor’s average. Not eight times the worst, eight times the average return. 

That’s pretty impressive. It shows that if you take care of everything else your bottom line will take care of itself. It doesn’t mean that it’s always easy to follow this path or that everyone who follows it will succeed. There are times when the right thing is not clear. Unforeseeable factors come into play, such as economic downturns, competitive issues, market trends; even a natural disaster like Super Storm Sandy can wipe out a thriving enterprise.

It takes smarts. It takes hard work. It takes courage to succeed. You have to be lucky and you have to follow the oldest of moral guides, the Golden Rule. That’s what ethics is really all about. Nor is it writ large that cutthroat bad guys won’t succeed. It just means that all things being equal, an ethical business model will dramatically outperform any alternative. Instinctively we know that; it’s why the vast majority of us are out there trying to do the right thing every day, enjoying the great feeling that comes from that effort win or lose.